European Heat Pump Sales Accelerate as Hormuz Crisis Drives Second Energy Price Shock in Four Years

European Heat Pump Sales Accelerate as Hormuz Crisis Drives Second Energy Price Shock in Four Years Consumers are switching to heat pumps to cut gas dependence, as analysts warn European power prices could jump another 10% this summer. Heat pump uptake is accelerating across Europe as consumers respond to soaring gas prices by reducing their dependence on piped fuel for heating. The shift echoes the rush that followed Russia's 2022 invasion of Ukraine, but the current driver is different: the ongoing turmoil in the Middle East and the effective closure of the Strait of Hormuz have cut off a critical supply route for LNG, pushing European energy costs sharply higher for the second time in four years.⁷ The supply picture is grim. Qatar halted LNG production as early as March 2, and the Hormuz blockade has trapped gas that would otherwise flow to European terminals. Around 25% of Europe's total gas supply is LNG, according to Chris Wheaton, oil and gas analyst at Stifel. With that quarter under threat, natural gas prices have soared, and buyers across Asia and Europe are scrambling for alternatives.⁵ Coal is filling part of the gap. Global coal shipments to South Korea, Japan, and the European Union surged 27% year-on-year last month, BIMCO data show. Global coal imports are on track to reach their third-highest monthly level on record. Wood Mackenzie analysts say energy security concerns are accelerating coal usage and delaying coal plant retirements across key Asian and European markets.³ Europe's power grids face their biggest test in decades heading into summer. Analysts told Montel that European power prices could jump 10% from current levels this summer amid hot, dry conditions and the possibility that the Strait of Hormuz remains closed through the season. The combination of supply disruption and peak cooling demand is stretching the system.^6,4 Southeast Europe has been partially shielded. Improved hydropower availability, combined with regional power producers having bought gas in advance through hedging, has insulated parts of the region from the worst price impacts. But that hedging will eventually roll off, and the hydro buffer depends on weather that is becoming less reliable.¹ Europe's climate trajectory compounds the problem. The continent was the world's fastest-warming region last year, reaching about 2.5C above pre-industrial levels, more than twice the global average, according to data from ECMWF and the World Meteorological Organisation. EU policymakers warn that hydropower, water resources, and power infrastructure are increasingly strained by heat, drought, and shrinking snow cover.² The energy crisis is not confined to Europe. Asia's heatwave has caused hours-long daily blackouts, putting more than one billion people at risk across Pakistan, Myanmar, Sri Lanka and India. Global power grids are being tested simultaneously, with war, drought, production shortages, and historically low inventories all hitting at once.⁴ For European households, heat pumps represent one of the few actions within their direct control. Gas boiler replacement cycles are aligning with the price incentive: the economics of switching improved dramatically when gas bills doubled, and the current crisis has reinforced that calculation. The technology displaces gas demand at the household level, which in aggregate begins to shift the demand curve for piped gas across the continent.⁷ The question is whether the uptake is fast enough to matter at a system level this winter. Heat pump installations take months to complete, and the supply chain for units and qualified installers was already stretched after the post-2022 surge. If the Hormuz crisis drags into autumn, European gas storage levels heading into winter will determine whether the demand-side shift from heat pumps provides meaningful relief or arrives too late to prevent another price spike.^6,7